Limitations:
It is assumed that tastes and preferences to be the same. But in reality tastes and preferences of the people need not be the same. So the system will contain multiple units, some similar and some different with regard to size and composition.
Assumed that the social goods consumption is non-rival. The government provided goods and services like fire station, a school of given size, a sewage disposal plant does not satisfy the consumption characteristics as non-rival. In all these cases, there will be congestion costs to the previous users.
Technical economies of scale need to be taken into consideration while determining the optimal community size.
Spillover benefits which are very common in between sub-central governments may result in inefficient provision of social goods output in the absence of any federal governments intervention by a system of grants-in-aid. The voting on their own feet hypothesis may become unrealistic as besides fiscal factors several non-fiscal factors such as job opportunities and housing.